GIC bought the shares of Salim Group's toll road company
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - GIC beli saham perusahaan jalan tol Grup Salim
7 November 2023
By: Muawwan Daelami
Jakarta - GIC Ventures, a government-investment fund management company from Singapore, purchased 33% shares of PT Margautama Nusantara (MUN), a toll road company controlled by PT Nusantara Infrastructure Tbk (META), for Rp3.3 trillion. META is a business unit of Salim Group, a top Indonesian conglomerate.
GIC purchased the shares of MUN through Warrington Investment Pte Ltd (WIPL), a subsidiary of GIC Special Investment Pte Ltd (GICSI), which is owned by GIC. WIPL and MUN have signed a divestment and transaction agreement on 3 November 2023 in Jakarta. In the agreement, MUN agrees to divest 2,673 or 33% of their shares to WIPL.
Besides that, MUN with their affiliated company, PT Metro Pacific Tollways Indonesia (MPTI), have signed a 10.3% share acquisition worth Rp1 trillion. MTPI is the controller of META with an ownership of 74.65%, based on RTI’s data.
MPTI is indirectly controlled by Metro Pacific Tollways Corp (MPTC), a company owned by Metro Pacific Investment Corporation (MPIC). As much as 48.2% of MPIC shares are owned by First Pacific, an investment company of Salim Group that is based in Hong Kong. First Pacific is the majority shareholder of PT Indofood Sukses Makmur Tbk (INDF), a leading food company in Indonesia.
Hence, MPTC’s effective share ownership in MUN decreased to 50.9% from 71.5%. MPTI uses its internal cash to execute affiliated transactions with MUN.
Nusantara Infrastructure Head of Corporate Communication & CSR D.P Pertiwi revealed that MUN would use funds from the sale of shares to WIPL and MPTI to pay off the debt from purchasing Sheikh Mohammed bin Zayed (MBZ) Toll Road. In December 2022, MUN officially acquired 40% of the shares of MBZ Toll Road that was previously called Jakarta-Cikampek (Japek) II Elevated from PT Jasa Marga Tbk (JSMR) for Rp4.3 trillion.
“The corporate action is expected to strengthen the company’s current and future financial performance,” Indah said in her official statement on Monday (6/11/2023).
Next, Indah asked to wait for the details of the impact from the plan to increase capital and affiliated transactions.
“We will make an official announcement that is in accordance with the applicable conditions. Please wait,” Indah said.
Currently, MUN is aggressively strengthening their portfolio in the freeway sector. It can be seen from the company’s action of constructing Jakarta Outer Ring Road (JORR) Elevated Cikunir-Ulujami (JORR-E) that is worth Rp21.3 trillion after their joint venture, JKTMetro, has been set as the concession holder.
The shareholders of JKTMetro are PT Marga Metro Nusantara (MMN) that is META’s subsidiary, PT Adhi Karya Tbk (ADHI), and PT Acset Indonusa Tbk (ACST). The toll road will be constructed fully elevated above the existing JORR with 2x2 lanes that are 3.5 metres wide.
JKTMetro has obtained the concession of JORR-E that is valid for 45 years from the issuance of the work order.
The company is currently looking for an external funding of Rp14.9 trillion to realise the toll road construction. META is also interested in being the majority shareholder of Pemalang-Batang Toll Road that will be divested by PT Waskita Karya Tbk (WSKT).
Financial performance
On the other hand, as of September 2023, Nusantara Infrastructure has logged a revenue of Rp665 billion, which increased from Rp602 billion last year. Their profit reaches Rp287 billion, which increased from Rp198 billion.
However, the company’s financial burden also increased to Rp370 billion from Rp129 billion. Hence, the company logged a net loss of Rp156 billion even though they previously made a profit of Rp65 billion.
During the period, the company’s cash flow from operating activities reached minus Rp24 billion from Rp136 billion in 2022. Their cash and cash equivalents reach Rp186 billion, which decreased from Rp616 billion.
The company’s total liabilities reach Rp7.8 trillion, which increased from Rp7.6 trillion. Their equities reach Rp3.3 trillion, while their total assets reach Rp11.1 trillion.
Meanwhile, Henan Putihrai Sekuritas analyst Jono Syafei explained that the transaction was a normal corporate action where META divested their ownership portion in MUN to GIC.
Hence, Jono continued that the toll road revenue under MUN would change into associate entity income and would no longer be logged as META’s business revenue.
“Hence, META’s toll road revenue will decrease drastically as META’s ownership in MUN will be reduced from 76.5% to 43.4% after the transaction,” Jono explained to Investor Daily.
Jono also admits that he cannot recommend META’s shares to investors as he needs to see the impact of the corporate action that will be reflected on next year’s financial report.
